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What drives the market on August 10?

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10.08.2020

The market has started the week with a mixed sentiment. The US dollar is holding its gains, while the S&P 500 is edging higher.

Fundamentals

On the one hand, the ongoing disputes between Democrats and Republicans add uncertainty to the market. They can’t reach an agreement over the fiscal stimulus package. The delay of announcing may weigh on the US economy. Another reason, which may deteriorate the overall sentiment, is US-China trade talks, which are scheduled for this week. If countries don’t make a deal, safe-havens will be boosted.

On the other hand, the NFP report pleasantly surprised investors. It came out better than expected. Non-farm payrolls rose by 1.76 million, while the forecast was 1.53 million. Average hourly earnings and unemployment rate beat all estimates too.

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Technical tips

EUR/USD

Let’s look at the EUR/USD chart. If it crosses the key psychological mark at 1.1800, it may climb up to the 61.8% Fibonacci level at 1.1820. Otherwise, if it falls below the support at 1.1750, which it has touched several times, it may drop even deeper to 1.1700.

S&P 500

The S&P 500 is approaching the all-time high at 3 390. It has been rising for 9 consecutive days. Watch out support levels at the lows of the beginning of this year at 3 325 and 3 270.

Gold

Gold is trading near the $2 030 level. The move above $2 050 will push the yellow metal to the record high at $2 075. On the flip side, if the price drops below $2 025, it may fall even deeper to the key psychological mark at $2 000.

USD/JPY

Finally, let’s look at the USD/JPY. The pair is edging higher on the positive NFP data. If the price jumps above 106.00, it will open doors towards the high of August 3 at 106.30. Support levels are at 105.70 and 105.40.

 

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Eyes on US retail sales

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13.08.2020

Follow the report on August 14 at 15:30 MT time!

Instruments to trade: EUR/USD, GBP/USD, USD/JPY

This report is especially significant for traders as it concerns the US dollar – the most traded currency in Forex market. Therefore, it will influence the whole market sentiment. Moreover, it's the primary measure of consumer spending, which, in turn, reveals the current economic activity. US retail sales rose by 7.5% in June of 2020, after it reached the record growth of 18.2% in May. Both times numbers beat analysts’ forecasts. Actually, the overall situation is getting better as more and more companies are reopening in the USA and the consumer spending is increasing. Also, it seems that the coronavirus spread has been taken under control as new cases continue declining.

If US retail sales are better than expected, the USD will surge.
If US retail sales are worse than expected, the USD will fall.

Check the economic calendar

 

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What drives the market on August 17?

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17.08.2020

The week has started with a mixed sentiment on the market. Let’s discuss main market movements and latest news.

First of all, investors weigh on the escalating tensions between China and the USA. Two countries delayed the meeting over their phase-one trade agreement, which has been scheduled for this weekend. Moreover, Sino-American disputes only increase amid the Donald Trump’s re-election. Trump’s officially made an order to sell TikTok’s US assets. According to president, the Chinese app presents a threat to the US national security.

It is worth noting, the Japanese data came worse than analysts expected. The preliminary GDP came out -7.8%, while the forecast was -7.5%. The preliminary report is the earliest and thus tends to have the most impact. After the report USD/JPY surged, but then contracted to the initial level. If the pair breaks down the 38.2% Fibonacci level at 106.35, it will open doors towards the key psychological mark at 106.00. In opposite, if USD/JPY surges above the high of August 13 at 106.78, it will jump to 50.0% Fibonacci level at 107.00.


The euro has started the week on a positive footing. It gained on the weak US dollar and the German Finance Minister’s suggestion to boost the job subsidy by 10 billion euros. If EUR/USD crosses the key resistance at 1.1880, it may jump to the high of July 31 at 1.1900. On the contrary, if it falls below the support at 1.1840, it will dip down to the next one at the 61.8% Fibonacci level at 1.1825.


S&P 500 keeps climbing up slowly, but surely. If it crosses the all-time high at 3 390, it may surge to 3500. On the flip side, the move below the low of August 11 at 3 335 will push the price lower to the next support at 3 270.


Finally, let’s look at the gold chart. It’s moving up towards the Friday’s high at $1 960. If it breaks it out, it will clear the way to the resistance at $1 980. Support levels are $1 930 and $1 910.

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Main market movements on August 19

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19.08.2020

The sentiment is indeed risk-on today! S&P 500 surged to the all-time high, and EUR/USD jumped to levels unseen since May of 2018. Let’s have a closer look.

Fundamentals

Joe Biden, the candidate for the US president, claimed that there is a strong “desire” between Democrats and Republicans to reach a deal over the next fiscal stimulus package soon. Actually, he announced the amount a bit smaller than most expected – 500 billion dollars. Nevertheless, the upcoming agreement itself has improved the market sentiment.

US-China trade talks have been postponed. White House haven’t yet announced the next date of the Sino-American meeting over the trade agreement. Market participants are waiting for next movements.

All eyes today on the FOMC meeting minutes and OPEC gathering.

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Technical tips

EUR/USD

The most traded pair has approached the resistance at 1.1950. If it breaks it through, it may surge to the next key psychological mark at 1.2000. Otherwise, if it falls below the 1.9000, it may fall even deeper to the low of August 17 at 1.1835.

Gold

XAU/USD has contracted after the move above the key psychological level of $2 000. It may be just a natural short sell-of ahead of the further rally up. If it crosses the resistance at $2 010, it may surge to the next one at the high of August 7 at $2 035. On the flip side, if it falls below the support at $1 965, it may fall even deeper to $1 940.

AUD/USD

AUD/USD has reached the 200 moving average on the weekly chart. It’s quite a strong resistance, therefore it’s likely to bounce off. Nevertheless, if it manages to cross it, it will surge to 0.7300. In opposite, the move below 0.7130 may push the price even lower to the key support at 0.7000.

Oil

There is an important event for the oil market today: OPEC meeting. Follow it as it will add some volatility to the oil market. Let’s look at the WTI chart. If the price rises above the yesterday high at $42.85, it will open doors towards the high of August 5 at $43.20. On the contrary, if it breaks down the support at $42.25, it will fall to $41.90.

Follow further news:

OPEC meeting will be hold during the day!

The detailed report of the last FOMC statement will be out at 21:00 MT time! Stay tuned!

Check the economic calendar

 

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How to trade on August 25?

More at: https://bit.ly/3lfR9sX

25.08.2020

The overall sentiment remains upbeat amid vaccine hopes and improved US-China relationships. US and China authorities had a phone call and claimed that some progress has already been made and they will continue negotiating. The USA recorded yesterday the lowest amount of new cases in over two months, that also encourages the market.

As a result, stocks rose on the current optimism. S&P 500 has surged to fresh highs. It is trading above the key resistance of 3 500. If it manages to cross it, the stock index may jump to 3 550. On the flip side, if it falls below 3 415, it may slump even deeper to 3 400.

Let’s move on to The overall sentiment remains upbeat amid vaccine hopes and improved US-China relationships. Let's have a closer look.. The price is just above the key support of 1.1800. The move below this level will drive the price to the Friday’s low of 1.1770. Otherwise, if it soars above 50 moving average on the 4-hour chart, it will clear the way towards 1.1880. Follow the US consumer confidence report today at 17:00 MT time as it will add some fresh volatility to the market.

Let’s discuss gold. It’s stuck in a range between $1 925 and $1 950. If it escapes this range breaking through its top, it may surge to the high of August 14 of $1 960. Otherwise, if it breaks down the bottom of the range, it may fall even deeper to $1 910.

The Bank of Japan released its core CPI of 0.0%, that was worse analysts’ expectations of 0.1%. Therefore, USD/JPY rose sharply. If it breaks out the high of august 3 at 106.30, it may jump to the next resistance of 106.60. Support levels are at 106.00 and 105.80.

Finally, let’s talk about AUD/USD. The risk-on currency has modestly reacted to the upbeat sentiment. If it rises above the yesterday high of 0.7200, it will surge to the high of August 6 at 0.7235. Otherwise, if it drops below the Friday’s low of 0.7150, it may slump even deeper to 0.7110.

Follow the report of US consumer confidence at 17:00 MT time!

Check the economic calendar

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Forex news on the last day of summer

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31.08.2020

The US dollar has started the week on the positive footing, while riskier assets are dipping down. Let’s discuss last market movements in more details.

Chinese economic activity has shown signs of a sustained recovery from the virus slump. Manufacturing PMI came out almost as planned: 51.0 vs. the forecast of 51.1. Non-manufacturing PMI turned out even better than analysts anticipated. It was 55.2, while only 54.0 was foreseen. As a result, the Chinese yuan gained significantly. Let’s look at the USD/CNH daily chart. The pair has been confidently declining since the end of May. Today it has almost reached the levels unseen since end of January. If it falls below the 200-week moving average of 6.8100, it will open doors towards the low of January 20 at 6.7500. Otherwise, if it jumps above the high of August 21 at 6.9200, it may surge to the nest resistance of 6.9700.


Let’s move on to Japanese latest news. The country is looking for a new prime minister. Besides, Japanese stocks have surged after Warren Buffet claimed an investment in the country’s local firms. The Japanese yen gained after the positive news, but then the US dollar outperformed it. The pair has bounced off the 23.6% Fibonacci retracement level at 105.51. If it breaks through the key psychological mark of 106.00, it may climb up to the key resistance of 106.00. In the opposite scenario, if it falls below 105.51 again, it may dip down to the low of August 19 at 105.15.


As for the virus, investors have optimistic prospects for a vaccine. China has approved the Sinovac COVID-19 vaccine candidate for emergency use. The US FDA claimed that it is planning to fast-track vaccine approval if benefits outweigh the potential risks.

S&P 500 reached the all-time high of 3 525. If it rises up to 3 550, it will jump to 3 600. Otherwise, the move below the key psychological mark of 3 500 will drive the price to the next support of 3 470.


Finally, let’s talk about gold. It has reversed from the resistance of $1 975 and started falling down. If it breaks down the support of $1 955, it will fall deeper to the next one at $1 930. On the flip side, if it jumps above $1 975, it may climb up to the key psychological mark of $2 000.

Follow further news:

Fed’s chair, Richard Clarida will make a speech at 16:00 MT time. He may unveil some details of the Fed's new approach to inflation targeting, which sent the US dollar down last week.

 

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What drives the market on September 2?

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02.09.2020

The US dollar has reversed from its’ losses, caused by the dovish Fed statement. Yesterday US ISM Manufacturing PMI came out 56.0, beating estimates of 54.6 and signaling the industry expansion. It’s one of the main indicators of economic activity as businesses adapt fast to a new environment, and their purchasing managers have a sense of the current economic state. As a result, the optimistic report has driven the greenback upward.

Today the Australian GDP turned out worse than analysts expected. It contracted by 7.0%, while the forecast was -6.0%. The Australian dollar has started dipping down amid the negative data. Let’s look at the charts. AUD/USD has bounced off the key resistance of 0.7400 and started dipping down. If it crosses the support of 0.7300, it may fall even deeper to the low of August 27 at 0.7240. In the opposite scenario, if it manages to break above 0.7365, it may rise up to 0.7400.


Later on, German retail sales slumped by 0.9%, while analysts foresaw the increase by 0.5%. The worse-than-expected report added headwinds to already weakening EUR. EUR/USD has just broken through1.1900. The drop below the 50-period moving average at 1.1850 will drive the pair lower to the key support of 1.1800. On the flip side, if it jumps above 1.1900, the way to 1.2000 will be open.

The ADP report at 15:15 MT time will add fresh volatility to the pair. If the ADP is better than the forecasts, the USD will gain and, therefore, drive EUR/USD down. Otherwise, if the ADP is worse than the forecasts, the USD will fall and, therefore, drive EUR/USD up.

Check the economic calendar


Let’s move on to gold. XAU/USD has reversed from the support of $1 960. If it manages to cross the resistance of $1 990, it may surge to the psychological mark of $2 000. Support levels are at $1 960 and $1 950.


Finally, let’s discuss the S&P 500. It rallied to a record high of 3 540, driven by Tesla and Apple, which gained due to their stock splits and positive economic data. The move above 3 550 will drive it to 3 600. Support levels are 3 490 and 3 470.

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